Afrimat lifts headline earnings
CAPE TOWN - Industrial minerals, bulk commodities and construction materials group Afrimat shot the lights out by lifting headline earnings a share by 94.3 percent to 181.9 cents in the six months to August 31.
Revenue was up 19.9 percent to R1.7 billion. The rise in earnings was mainly due to an improvement across all three business segments, and a strong performance from the bulk commodities segment, CEO Andries van Heerden said Thursday.
The operating profit margin increased to 18.5 percent from 14.1 percent.
He said the operating units had been strategically positioned to deliver good service to customers and act as a hedge against volatile business conditions.
The product range was also well diversified to include aggregates and concrete-based products as construction materials and limestone, dolomite and silica as industrial minerals as well as iron ore as bulk commodities.
A dedicated business development team was identifying and pursuing opportunities in existing markets and anticipated new high-growth areas in southern Africa, he said.
The group declared an interim gross dividend of 36 cents per share, well up from 19 cents for the period to end-August 2018.
In the Bulk Commodities segment, consisting of the Demaneng iron ore mine, revenue increased by 77.5 percent to R497.7m and operating profit increased by 176.2 percent to R138.2m as a result of an impressive increase in volumes and favourable pricing.
Iron ore prices have since decreased from highs of US$120 per ton to around US$86 per ton.
Industrial Minerals businesses increased revenue by 5,2 percent to R299.2m.
The Construction Materials segment experienced a marginal recovery, with revenue and operating profit increasing by 6.1 percent and 6.5 percent respectively.
“We foresee continued growth and expect further expansion of our range of unique products”, he said, adding that selective acquisitions was also expected to deliver good results. The share price opened 0.06 percent lower at R32.33 on Thursday.